Vanshika

Accounting is the systematic process of recording, classifying, summarizing, analyzing, and interpreting financial transactions to communicate a business's financial health to stakeholders. Known as the "language of business," it enables informed decision-making by tracking income, expenses, assets, and liabilities. Key components and functions of accounting include: Core Process: Recording transactions (bookkeeping), classifying data, and summarizing them into financial reports. Financial Statements: Producing the income statement, balance sheet, and cash flow statement to show profitability and financial position. Types: Includes financial accounting (external reporting), management accounting (internal decision-making), tax accounting, and cost accounting.